Taiwan and Ireland are regarded as being similar in their geographic positions and economic performances. Both countries moved from being agricultural economies to become major regional players, and are often pointed to as examples of positive national development and innovation. The main purpose of this article is to compare the two island countries' innovation policies in a national context. The taxonomy of innovation policy proposed by Rothwell and Zegveld [1981, Industrial innovation and public policy. London: Frances Printer Ltd.] was adopted as the analysis framework for this study. The comparison shows that Taiwan's government employs more top-down policy instruments such as providing government research funding and resources to target industries. The Irish government successfully creates an innovation-friendly environment to attract foreign direct investment (FDI) to facilitate research and development at the firm level. Finally, this article provides policy implications and recommendations based on what was learned from the comparison of the two countries.